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Election 2010: Pensions reform set out in new coalition agreement

21 May 2010 / by Lois Avery

Pension savers could be given early access to their money as part of the new government’s plans for the retirement sector.

The coalition agreement was released today and formally outlines David Cameron and Nick Clegg's plans for the next five years.

The coalition has vowed to explore allowing early access to pension savings in a bid to boost the appeal of pensions.

The Lib/Con’s ’Programme for Government’ document published today, says: “We will explore the potential to give people greater flexibility in accessing part of their personal pension fund early.”

A promise has also been made to ‘simplify the rules and regulations relating to pensions to help reinvigorate occupational pensions, encouraging companies to offer high-quality pensions to all employees, and we will work with business and the industry to support auto enrolment.’

It also pledges to phase out the default retirement age and end the rules requiring compulsory annuitisation at 75.

Although the document does not mention whether higher rate tax relief on pension contributions will be axed nor does it mention anything about the future of the National Employment Savings Trust.

Other plans outlined within their five year agreement include, electoral reform such as a Referendum Bill, which includes provision for the introduction of the Alternative Vote. Introduction of a power of recall, allowing voters to force a by-election where an MP is found to have engaged in serious wrongdoing.

Taxation plans also state that the coalition will aim to increase the personal allowance for income tax to help lower and middle income earners. And a rise in Capital Gains Tax for non business assets will also be at the forefront of their policies.